## New EU Regulations Threaten Tether's Presence in European Crypto Markets

Starting next month, major stablecoins like Tether (USDT) will be banned from the European crypto market due to stringent new EU regulations. This change is poised to cause significant disruption in European crypto trading.

Stablecoins, such as Tether, are cryptocurrencies pegged to real-world assets like the US dollar, offering more stable prices. Tether, with a market value of $160 billion, is a prominent example. However, it does not meet the EU's new MiCA (Markets in Crypto-Assets) Regulation, which demands high standards of capital and transparency.

As a result, Tether will no longer be available in the EU and has already been delisted from several trading platforms. Kraken, one of the largest exchanges, is also considering halting USDT trading. This ban will compel European investors to seek alternative stablecoins, potentially disrupting market liquidity and stability, according to Steno Research. The EU's isolated stance on crypto regulations could further complicate matters.

Tether's CEO, Paolo Ardoino, has expressed doubt about reconciling with the European Banking Authority. Few stablecoins currently comply with the new EU rules. Binance and other major exchanges are looking to Circle’s USDC to fill the gap. Circle also offers EURC, a euro-pegged stablecoin, while Societe Generale’s EUR CoinVertible is one of the few approved options, though it hasn't gained much traction.

Tether is not pursuing compliance with the new regulations. Ardoino has criticized the EU's capital and coverage requirements, which mandate that 60% of Tether's assets be held in EU banks. Currently, Tether's investments are mostly in corporate bonds and other cryptocurrencies, earning substantial interest but posing risks to investors.

This regulatory shift marks a significant moment for the European crypto market, with potential ripple effects for investors and exchanges worldwide.